Only 3% of informal sector can pay taxes, says Oyedele at Nigeria’s tax reform summit.
New laws aim to ease burden, exempt poorest, and boost fairness through progressive tax structure.
The head of Nigeria’s Presidential Fiscal Policy and Tax Reforms Committee has said that just 3% of the country’s informal sector has the financial strength to pay taxes. He explained that only this small group of operators can currently afford to make tax payments.
This was shared during a recent tax summit in Lagos, where discussions focused on how Nigeria’s tax system is being reshaped to fit the present economic situation. The event explored how the new structure will affect individuals and businesses.
According to the committee’s findings, most informal workers do not earn enough to be taxed. As a result, the reform includes a legal exemption for the remaining 97%, giving them time to grow financially before being brought into the tax net.
Concerns were also raised about some companies trying to wrongly register as small enterprises in order to escape tax responsibilities. The committee warned that any such false claims would be discovered, and penalties would apply. The goal is to build a fair system where people are taxed based on their true income, and tax evasion is reduced.
The new system is progressive, meaning those who earn more will pay more. It also includes key updates to tax rules, like relief for low-income earners and clearer tax collection processes. The official publication of the law is expected soon.
It should be noted that the president approved four tax-related bills in June 2025, which will begin in January 2026. These laws bring several changes. For example, anyone earning below ₦800,000 per year will not pay personal income tax. Other changes include combining federal taxes and appointing the Federal Inland Revenue Service (FIRS) as the sole collector of taxes at the federal level.
At the summit, experts emphasized that real progress depends on everyone working together. They said cooperation from the government, business leaders, and individuals is necessary to make the reforms succeed. Involving all stakeholders is seen as the best way to ensure the reforms bring the expected results.
